The USDA Rural Housing loan is a government insured loan that is available for the purchase of home within specific rural areas. 
The benefits of this program include:
- 100% financing – no down payment required
- Low monthly mortgage insurance (PMI)
- Unlimited seller’s concession – seller can pay all closing cost
- Low, fixed rates
No Down Payment Required – Unlike conventional and even FHA loans, USDA Home Loans do not require any down payment. This is especially beneficial for first time homebuyers. Saving up a down payment can be very difficult. Utilizing a USDA Home Loan means that is no longer an issue.
Low PMI – The monthly mortgage insurance on a USDA loan is much lower than it is for an FHA or conventional loan. This can greatly reduce your monthly mortgage payment, allowing you to qualify to buy a more expensive home, or allow you to put more money into savings every month.
Unlimited Seller’s Concession – A seller’s concession allows the seller to pay for some (or all) of your closing costs out of their proceeds from the sale of the home. Other loans, including conventional and FHA, limit the amount that the seller can pay to 3-6% of the purchase price. In some states, NY in particular, closing costs can easily outweigh the allowed concession on these loans. With a USDA Home Loan, however, there is no limit to how much the seller can pay, meaning that you could buy a home without having to pay for any of the closing costs out of pocket. Couple that with 100% financing that is available, and you can be in a home without any of your own money, meaning you can keep your money in savings to cover any expenses that arise.
Financed Closing Costs – On some purchase transactions, foreclosures and short sales in particular, a seller’s concession is not possible. A USDA Home Loan allows the financing of the closing costs even if the seller will not agree to a seller’s concession. All of the closing costs (except discount points) can be financed, up to 100% of the appraised value of the home. This is extremely beneficial when a seller’s concession is not an option.
Low Fixed Rates – USDA Home Loans offer a low fixed rate. This is a rate that starts low, and stays low. That gives you the peace of mind that your payment will not increase in the future and that your home will remain affordable for years to come.
More flexible credit requirements – Because a USDA Home Loan is insured by the government, we are able to offer USDA Home Loans to applicants that may not qualify for other types of home financing, including FHA loans.
There are many restrictions to the program, including geographic location of the property, income, etc. You can determine your eligibility by visiting the USDA eligibility site.
Once you have determined that the area in which you are looking for a home and your income both qualify, contact one of our loan specialists for more information and approval.
